Spatial Analysis of Market Power of Cassava Starch in Brazil
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The present study aimed to investigate the spatial price transmission of starch,
addressing the major producing regions. The specific objectives were to identify their
long-term behavior and to verify possible asymmetries on the price transmission. The
analysis of price transmission among the markets indicates that prices cointegrated
themselves in the long run, leading to the Vector Error Correction Model (VECM).
Through the econometric regressions it was possible to verify the application of the
Law of Price for only a region under analysis. This study concluded that the markets
for starch were not spatially integrated. Thus, it was possible to infer that the market
for starch showed a competitive inefficiency.